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ENG106W12-Q5-solution

# ENG106W12-Q5-solution - ENG 106 Winter ‘12 Quiz#5 Open...

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Unformatted text preview: ENG 106 Winter ‘12 Quiz #5 Open Notes Name: A laboratory is buying \$150,000 worth of lab equipment, which falls under the 7-year MACRS depreciation schedule. a) Determine the deduction in year 2 using the MACRS depreciation. d2 = (24.49%) (\$150,000) = \$36,735 b) Determine the book value of the lab equipment at the end of year 2. Note, even if we sell it December 31st we only get one half year’s depreciation. BV2 = \$150,000 - (\$150,000) (14.59 + 24.49/2%) = \$150,000 – \$40,252.50 = \$109,747.50 c) If the lab equipment was sold for \$100,000 at the end of year 2, determine the net profit or loss of the equipment. Indicate whether it is profit or loss. S = \$100,000 – \$109,747.50 = -\$9,747.50 (loss) Table A-1. 3-, 5-, 7-, 10-, 15-, and 20-Year Property Half-Year Convention Depreciation rate for recovery period Year 3-year 1 2 3 4 5 5.76 6 7 8 9 10 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 11 12 13 14 15 15-year 10.00% 18.00 14.40 11.52 9.22 5.00% 9.50 8.55 7.70 6.93 3.750% 7.219 6.677 6.177 5.713 7.37 6.55 6.55 6.56 6.55 6.23 5.90 5.90 5.91 5.90 5.285 4.888 4.522 4.462 4.461 5.91 5.90 5.91 5.90 5.91 4.462 4.461 4.462 4.461 4.462 2.95 20.00% 32.00 19.20 11.52 11.52 7-year 10-year 3.28 33.33% 44.45 14.81 7.41 5-year 4.461 4.462 4.461 4.462 4.461 16 17 18 19 20 2.231 21 Table A-2. 20-year 3-, 5-, 7-, 10-, 15-, and 20-Year Property Mid-Quarter Convention Placed in Service in First Quarter Depreciation rate for recovery period Year 3-year 1 2 3 4 5 58.33% 27.78 12.35 1.54 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Publication 946 (2010) 5-year 35.00% 26.00 15.60 11.01 11.01 1.38 7-year 25.00% 21.43 15.31 10.93 8.75 8.74 8.75 1.09 10-year 15-year 20-year 17.50% 16.50 13.20 10.56 8.45 8.75% 9.13 8.21 7.39 6.65 6.563% 7.000 6.482 5.996 5.546 6.76 6.55 6.55 6.56 6.55 5.99 5.90 5.91 5.90 5.91 5.130 4.746 4.459 4.459 4.459 0.82 5.90 5.91 5.90 5.91 5.90 4.459 4.460 4.459 4.460 4.459 0.74 4.460 4.459 4.460 4.459 4.460 0.565 Page 75 ...
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